Escalation of commitment

Marketing

Quantum mechanics

Product (mathematics)

Microeconomics

Economics

Computer science

New product development

Business

Physics

Process management

Mathematics

Geometry

Industrial organization

Action (physics)

Regret

Machine learning

Industrial Marketing Management

Escalation of commitment, defined as the continuation in a failing course of action, is a persistent problem for decision makers in business markets, especially those involved in new product development (NPD). To address this issue, we use Anticipated Regret Theory to develop a model and then empirically test it to demonstrate how forward-looking emotions can lead decision makers to continue failing NPD projects in business-to-business (B2B) markets. We recognize that there are two countervailing types of anticipated regret (i.e., keep regret and drop regret) and test both in our model by adopting a mixed-methods empirical approach. In a quantitative study, a total of 280 subjects completed a NPD decision-making exercise in which various antecedents of persistence with a losing new, business-to-business NPD project were examined. The results suggest that anticipated drop regret plays a significant role in commitment to a failing course of action, whereas anticipated keep regret actually reduces commitment. In a second, qualitative study, twenty experienced NPD professionals operating in high-technology, B2B markets were interviewed either in-person or by telephone. The results suggest that anticipated drop regret is a more serious problem than anticipated keep regret, supporting the quantitative study.

Anticipated regret and escalation of commitment to failing, new product development projects in business markets